What is
energy deregulation?.

Electricity deregulation

In the 1960s, oil had overtaken coal as the number one energy fuel source in the United States. Due to this shift, many electric utilities had become reliant on oil to fuel their plants because it burned more cleanly than coal.

However, when petroleum costs skyrocketed during the oil crisis 10 years later, electricity rates did too. The average cost per kWh more than doubled during this time, devastating many of the country’s manufacturing industries in the process.

This increase in electricity prices posed major issues, both for electricity consumers and the economy as a whole. But one thing was clear: the country needed to reduce its dependence on foreign oil by improving its own energy generation processes

The Public Utility Regulatory Policy Act

In response to the growing energy crisis, the Public Utility Regulatory Policy Act was passed with the goal of creating a market for alternative, non-utility power suppliers. This act laid the groundwork for providing energy choice within the electricity sector, and was also a major driver of the concept of renewable energy.

The Energy Policy Act of 1992

In the decades after the oil crisis, the push to reduce the country’s dependence on foreign oil continued.

This, coupled with the rise in awareness around fossil fuel emissions, led the country to explore alternative fuels, as well as renewable and efficient energy generation methods. Thus, the Energy Policy Act of 1992 was penned and passed in October of that year.

The act incentivized business owners to take part in energy efficiency programs, created efficiency standards for home appliances, encouraged the exploration of alternative fuels like methanol and ethanol, and authorized tax incentives to produce renewable energy technologies, among many other things.

In addition to these measures, it also opened the competitive market even further to new electricity suppliers.

This act has contributed to many major leaps in efficient and renewable electricity generation methods, and allowed consumers to make decisions about where their electricity comes from.